What Is a Mortgage Lawsuit?

A mortgage lawsuit is a legal proceeding filed in connection with a home mortgage loan. More often than not, this type of lawsuit involves collection efforts because the borrower failed to meet the payment requirements. While many other types of related legal issues can be involved, this is generally the main issue involved in a mortgage lawsuit.

There can be several different parties involved in a mortgage lawsuit. This can include the borrower; the mortgage lender (usually the bank or a mortgage company); property appraisers; and other interested lenders. Additional creditors can be involved if there has been more than one mortgage drawn for the property in question. Thus, mortgage lawsuits can often be quite complicated.

What Are Some Legal Issues Involved in Mortgage Lawsuits?

As mentioned, most mortgage lawsuits are actually collection claims filed by the lender against the borrower. However, mortgage lawsuits can

Confusion regarding state laws governing property and mortgages (these are different for each state)

Liens on property (allowing the creditor to take possession of the title)

Foreclosure and bank or judicial sales of the home

Various other legal issues

Lastly, there may also be conflicts involving second or third mortgage lenders. There are very specific laws regarding which mortgage lenders have “priority rights” when it comes to collecting debt in a mortgage lawsuit. These types of proceedings generally require the assistance of an attorney due to their complexity.

What Types of Legal Remedies Are Involved in a Mortgage Lawsuit?

One of the more common outcomes of a mortgage lawsuit is that the lender may be granted a lien, which would allow them to take possession of some of the borrowers property to make up for the payments. As a recourse, there are some instances where the borrower can suspend or remove a lien due to certain circumstances. It may also be possible in some instances to suspend or delay foreclosure.

Other remedies may include garnishment of wages to make up for the missed payments. Lastly, the parties can sometimes agree to a new debt arrangement that would be more beneficial for each party.

Do I Need a Lawyer for Help With a Mortgage Lawsuit?

Mortgage lawsuits can be challenging to deal with, regardless of what legal issues are involved. You may need to hire a lawyer for assistance, legal advice, and representation during a mortgage lawsuit. Your attorney can help you understand how the mortgage laws may affect you, as these can be different in every state.